Fixed income, foreign exchange markets maintain momentum, registering 15.31 billion naira, turnover of 10.12 billion dollars in one month

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Eromosele Abiodun

Investor interest in the fixed income and currency markets continued to soar, with both markets seeing significant increases in turnover in June 2021, a report from FMDQ OTC limited revealed.

Analysis of the report found that the fixed income markets recorded a turnover of N15.31 trillion for the month ended June 30, 2021, which represents a monthly increase (MoM1) of 49. 51 percent to 5.07 trillion naira and a year over-year (YoY2) decrease of 7.04 percent (N1.16trn).

The report found that foreign exchange (FX) and money market trading were the main contributors to fixed income markets turnover in June 2021, jointly accounting for 64.18% of total turnover in fixed income markets. fixed income securities markets.

Likewise, the foreign exchange market recorded a turnover of 10.12 billion dollars (4.16 trillion naira) in June 2021, which represents an increase of 38.44% of the MdM (2.81 billion dollars) compared to sales recorded in May 2021 ($ 7.31 billion).

According to the FMDQ, the MoM’s increase in total foreign exchange market turnover was jointly driven by the increase of 17.90 percent ($ 0.75 billion) and 65.73 percent (2 , $ 06 billion) of FX Spot and FX derivatives revenues respectively in June 2021.

“The increase in MoM of foreign exchange derivatives revenue is due to the increase in MoM of all derivative revenue, as the revenue of foreign exchange swaps, FX Forwards, FX Futures and other derivatives increased 88.07% ($ 0.92 billion), 19.80% ($ 0.26 billion), 118.18 percent ($ 0.51 billion) and 106.84 percent ($ 0.51 billion) cent ($ 0.37 billion) respectively.

“In the OTC FX futures market, the next month contract3 (NGUS JUNE 30, 2021) with a total notional outstanding value (NV) of $ 0.29 billion matured and was settled, while A new long term contract (60M4), NGUS JUN 24, 2026 was introduced at a futures price of $ 613.76 / N. The total NV of OTC FX Futures contracts open as of June 30, 2021 was approximately (approximately) $ 4.25 billion5, which represents an increase of 7.32 percent ($ 0.29 billion) from its value as of May 31, 2021, and a reversal of the downward trend observed since May 2020, ”he said.

On the currency side, the report found that the Naira depreciated against the US Dollar at the I&E FX window, losing 0.01% ($ 0.03 / N) to close at an average of 411.30 $ / N in June 2021 versus $ / N411.27 recorded in May 2021, “while trading in a range of $ / N410.00 and $ / N412.00 in June 2021”.

Likewise, he said the naira had depreciated against the US dollar in the parallel market, losing 2.94% (N $ 14.29) to close at an average of $ 500.57 / N in June 2021. against $ 486.28 / N recorded in May. 2021.

“As a result, the average spread between exchange rates in formal (I&E FX window) and unregulated (parallel) markets increased from $ 14.26 / N to $ 89.27 / N in June 2021. At the I&E FX window, the Naira depreciated against the US dollar, losing 0.01 percent ($ 0.03 / N) to close at an average of $ 411.30 / N in June 2021 against $ 411.27 / N registered in May 2021 while trading in a range of $ 410 / N .00 and $ / N412.00 in June 2021

Likewise, the naira depreciated against the US dollar in the parallel market, losing 2.94% ($ 14.29 / N) to close at an average of $ 500.57 / N in June 2021 against 486. , $ 28 / N recorded in May 2021. As a result, the average spread between exchange rates in formal (I&E FX Window) and unregulated (parallel) markets increased from $ 14.26 / N to 89.27 $ / N in June 2021. “

The report adds that treasury bills were the most traded sovereign debt securities during the month under review, accounting for 28.71 percent (0.79 trillion naira) of total market revenue in the securities market. Sovereign fixed income, while FGN bonds with maturities of 20 years or longer were the most actively traded long-term sovereign debt securities11, accounting for 23.00 percent (0.63 trillion naira) of turnover. total sovereign fixed income market business.

He added: “The total turnover in the money market segment increased by 100.35% (N2.84trn) to N5.67trn in June 2021. This is due to the increase of the MoM of the turnover of Business Rest / Buy-backs and Investments / Take 102.63 percent (2.73 billion naira) and 58.82 percent (0.10 trillion naira) respectively. The average OBB rate (guaranteed loan rate) and the O / N rate increased by 1.40 ppt and 1.31 ppt respectively, to close at 16.71% and 17.19% in June 2021. “


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